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7 Tips for First-Time Home Buyers in Santa Cruz
Home & Garden

7 Tips for First-Time Home Buyers in Santa Cruz

Navigate an exciting time with a handy guide for first-time home buyers in Santa Cruz. Your new coastal home doesn't have to cause stress.


6 min read

June 06, 2023

Amy Jeske is a local Santa Cruz realtor that knows the area like the back of her hand. Making the move to a new town can be an intimidating experience, Jeske makes things easy with a wealth of experience and ensures every relocation is as smooth as can be. Amy Jeske is a member of the Recommended Business Program.

Buying your first home is an exciting life milestone, and there are an overwhelming number of options and information out there to consider when planning on buying a home in Santa Cruz, CA. There’s no shortage of amazing neighborhoods and styles of homes to consider in this beautiful coastal city. That being said, the homebuying process can also seem pretty daunting. 

As in many West Coast cities, the Santa Cruz real estate market is hotter than ever, sellers have the advantage, and competition is fierce. The Santa Cruz median home price currently stands at $1.6 million and has been trending up roughly 8% annually. This is just one of many reasons why it's good to make smart decisions as you navigate the listings of Santa Cruz homes for sale. A large part of buying a home for the first time is about doing your homework, thinking ahead, and being proactive. Let’s run down seven essential tips for first-time home buyers in Santa Cruz.  

Choose a Realtor You Trust

A good realtor will be the best ally in your corner, providing you with all the information you need to make smart informed choices.

A local trustworthy realtor will be the best advocate in your court as you work through the home-buying process. This is why choosing the best realtor for you is such an important step. An experienced realtor will have good knowledge of the Santa Cruz real estate market and provide detailed information about each neighborhood you are considering. Local Santa Cruz realtors will also have a good idea of the average property prices in different parts of the Santa Cruz area. This allows you to make an informed choice, an important benefit when it comes time for one of the most significant investments of your life.

Professional realtors will also have a wealth of institutional knowledge, experience, and plenty of useful community connections; making things a lot easier because you won’t have to do all the legwork to find local sellers, inspectors, brokers, and lawyers alone. Another considerable benefit of working with a trusty realtor is that they will have a go 

Know Your Credit Score

A higher credit score leads to a lower interest rate on your mortgage, so it’s a good idea to check your credit score before you embark on your home-buying journey. This gives you extra time to work out any snafus with your credit and improve your score. Don’t fret if you find yourself with a poor or moderate credit score. Fortunately, there are a few ways you can rectify this situation and get yourself in a better position to afford a mortgage. 

First off, check your credit report for errors and report any you find. Sometimes things happen and go unnoticed. Scrutinizing your credit report might unearth some mistakes, or maybe even potential fraud. Your credit bureau can usually resolve most errors in the space of about thirty business days. Check with your lender before making any changes, but it might be a good idea to pay any outstanding credit card debt. Debt doesn’t do your credit score any favors, so having a clean slate can improve your score. You might also consider increasing your credit card limits since a higher limit reduces your utilization rate, and this can contribute to lower mortgage interest rates.   

Get Pre-approved With a Trusted Local Lender

It’s best to keep your budget flexible and versatile so you can meet any potential costs that might crop up later.

Once you’ve sorted out any outstanding debts and beefed up your credit score, it’s time to get set up with a mortgage. I highly recommend that first-time home buyers in Santa Cruz get preapproved for a mortgage with a local lender, as this helps to make the process easier. Once you’re pre-approved you know exactly what your purchasing power will be because you’ll know your borrowing limits. In short, getting pre-approved means you’ll know which homes are out of reach and which ones are right on target. 

Plus, getting pre-approved signals to buyers and realtors alike that you are a serious buyer; someone who is committed to buying a Santa Cruz home for sale. This is important, especially for first-time home buyers, because it shows that you’ve been vetted by a lender, so there’s less chance of financial trouble further down the line. Home sellers love to see this because it means they have the peace of mind that comes with a financially responsible buyer. 

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Do Your Homework

A big part of the home-buying experience is doing research. As a first-time home buyer in Santa Cruz, having a good idea of what you want in your home will make your search much easier. Research duplexes, single-family homes, condominiums, townhouses, and other home types and see which one fits your needs best. 

As you do this, bear in mind the space you might need, your budget, and the ancillary fees that come with certain home types. For example, are you ok with paying HOA fees? Does the municipality your home is in have any extra taxes you should know about? Do you want a place with a decent-sized lawn? Last but not least, go to as many open house events as you can. May, June, and July tend to be some of the hottest months in the Santa Cruz real estate market, so there will likely be more than a few open houses for you to check out. 

Research the Neighborhoods That Interest You

The neighborhood you choose is just as important as the home itself.

The other part of doing research as a first-time home buyer in Santa Cruz is looking into the neighborhood you’ll be living in. Depending on your circumstances, there are a bunch of indicators you’ll want to look at that can be a good indicator of quality of life. As you browse Santa Cruz properties, check out the walkability of the neighborhood in question, whether there is easy parking or good access to public transit, and what property taxes look like. 

You’ll also want to look into local goods and services. If you’re looking at a family home, does the neighborhood you’re considering have good schools and kid-friendly recreational areas? Is there a variety of grocery and goods stores nearby so you don’t have to drive across town? If you’re looking at a neighborhood with higher population densities, are you ok with limited parking? These kinds of questions help narrow down your options and give you a better idea of what you’re looking for.   

Stick to Your Budget

Your budget needs to be a reasonable number with some flexibility, but also comprehensive. This means taking into account additional costs beyond the mortgage payment, including homeowners insurance, property taxes, utility bills, emergency repairs, Homeowners Association (HOA) fees, and any other costs that might pop up later. It is important to ensure that your budget can meet these costs and can also cover any future expenses, such as an increase in utility rates.

As for mortgages, lenders generally want to see that you have at least two months of reserves in your savings account for the mortgage, taxes, and home insurance. What that means is that if your total mortgage, taxes, and insurance fees are about $2,000 per month, you’ll need $4,000 in savings. That being said, it is possible to find mortgage options that do not require a reserve, but even so, it’s best to keep two months worth of expenses in the bank anyway. As a first-time homebuyer, it’s smart to give yourself as much security as possible.

Ask Questions!

It’s important that you and your realtor maintain open lines of communication throughout your home-buying journey.

Home inspections are an important step on the journey to buying a home for experienced and first-time buyers in Santa Cruz alike. However, you’ll want to find the best inspector your money can buy, and that means verifying that the inspector is licensed and experienced. I also recommend seeking referrals from other home buyers before going with an inspector, as this can also help you to make the best decision.

Likewise, the best way to find out if a realtor is the best fit for your needs is to establish a constructive and open dialogue with them, and that means asking plenty of questions. Although it’s a good idea to do as much of your research as possible, feel free to ask your realtor about any details of the home-buying experience you might need clarification on. As a first-time home buyer in Santa Cruz, you’ll want somebody willing to patiently guide you through the process. If things don’t feel right, remember you can always walk away and find someone else. This process is difficult, and an ideal realtor will be a great collaborative partner to help you achieve your home-buying goals.

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